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HomeMy WebLinkAbout5.b. Minnegasco Natural Gas FranchiseIt r _CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: JANUARY 21, 1992 AGENDA ITEM: MINNEGASCO - NATURAL GAS AGENDA SECTION: FRANCHISE OLD BUSINESS PREPARED BY: STEPHAN JILK, CITY ADMINISTRATOR AGENDA10"-M .µ ATTACHMENTS: DRAFT ORDINANCE, SERVICE AREA MAP APPROVED BY: LETTER FROM MINNEGASCO & PEOPLES NAT'L GAS Minnegasco, a Division of ARKLA, Inc. has made application to receive a franchise for the operation of a gas utility in the City. Minnegasco has operated within the City since 1961 (which is in an area which was then Rosemount Township) and serves 13 customers in an area along 160th Street east of the City of Coates. They also serve customer in the City of Coates. Discussion on this occurred with the Utilities Commission and they have recommended its approval. Council has discussed this on January 7th and tabled discussion until this council meeting and requested additional information. The following is provided: 1. The following cities have Peoples Natural Gas and Minnegasco operating in them: Lakeville, Woodbury, Afton, Inver Grove Heights, Eagan, Spring Lake Township and Cottage Grove. 2. A service area designation map provided to all of the gas companies (attached) allows each company a specified area of the city to operate in. This is not being proposed to be changed. This map has not been formally adopted by the Council and should be in the future, but has been used by staff to designate areas for the utilities to operate in. 3. Alternatives to franchising Minnegasco would be to allow them to operate without a franchise or attempt to restrict their operations. The second would be difficult because we have allowed them to operate to this point since 1961. RECOMMENDED ACTION: Motion to adopt an Ordinance Granting to Minnegasco, a Division of ARKLA, Inc., a Delaware Corp., Its Successors and Assigns, Permission to Erect a Gas Distribution System for the Purpose of Installing, Enlarging, Operating, Repairing, and Maintaining in the City... etc.. COUNCIL ACTION: PEOPLES NATURAL GAS 2665145th St. West P.D. Box 455 Rosemount, MN 55068-4927 January 7, 1992 612-423.5900 The attached memo was sent to various Rosemount City officials and administrative personnel in December 1989. At that time, the Rosemount Utility Commission was considering a request from Minnegasco for an operating franchise. Our position has not changed since that time. We still feel that a third operating franchise in the City of Rosemount is totally unnecessary, and can only result in additional staff work for your personnel. Peoples Natural Gas has a significant investment in your community, and must rely on a mutual working relationship with you to ensure the continued growth of our involvement in your economic development. We would now, as stated in our letter of 1989, welcome the opportunity to meet with any of your elected, or administrative, officials to discuss this issue. Please allow us the opportunity to do so, prior to making any final decision. Thank you for your consideration. Sincere Regards, erard F. Love 1 District Manager GFLJamh PEOPLES NATURAL GAS -c Memo To File: 2665145th St, West 612423.5900 P.O. Box 455 Rosemount, MN 55066-4921 December 27, 1989 This memo is meant to document the concern of Peoples Natural Gas Co. regarding the possibility of the City of Rosemount issuing a "franchise to operate" in the City, to Minnegasco. We would like to go on record as being strongly opposed to such an action. Peoples Natural Gas Co. (P.N.G.) has served the community of Rosemount continuously since 1933, and feels that it has been a mutually rewarding relation- ship. We have operated our system in an efficient and safe manner and we have remained alert to the future growth areas of the community, in order to be able to serve these "added" areas when the growth arrived. For example, over the past two years --1988 and 1989--, P.N.G. has expended approximately $1,211,000 in this community to increase the efficiency 6 capacity of our existing system, and to add the necessary facilities to serve the coming growth in the community --which we feel to be primarily in the East, and Southeast areas of the city. In addition, we have budgeted at this time, another $150,000 for 1990 construction in Rosemount. These dollars have been invested in this com- munity, with the belief that we would be allowed to conduct our business in the same manner that we have for the past 56 years. However, this year, the City of Rosemount saw fit to issue a gas franchise to Northern States Power Co. --without even giving P.N.G. the opportunity to provide input as to our already - planned expenditures for additions to our system. Now, you are contemplating the issuance of yet a third franchise. We, therefore, would like the record to show that we feel it to be totally unnecessary for a third operating franchise to be issued. We can assure AT . ............. PEOPLES NATURAL GAS �;..... Page 2 you most stringently, that Peoples Natural Gas Co. is ,centirely capable of serving any, and all, customers in your community --now and in the years to come. As we have demonstrated, we are very willing to invest in this community --as, indeed, we are, in all communities which we serve --providing we feel that we will be allowed the opportunity to grow and to earn a realistic return on such investments. Because of the very nature of our business, we must plan well ahead for our growth, and also be willing to make investments "today" for growth loads which may, in reality, not reach fruition for several years. How- ever, once investment is made, it is there perman- ently --we cannot pick it up and move it, such as a retail store for example. That is why it is so important for good, and fair, relationships between our company and the communities which we serve. So, we would like to emphasize, once more, our objection to the issuance of another gas franchise in Rosemount. We would be happy to meet with anyone to fur- ther explain our concerns --as we have met in the recent past with Steve Jilk and Rich Hefti. Hopefully, we can continue to serve this community in a fair and open manner for another 56 years --or more --as we continue our business part- nership well into the 21st century. Sincerely, �, l071f] District Manager cc: Steve Jilk, Rosemount City Administrator Rich Hefti, Director, Public Works Rosemount Mayor and City Council Members Rosemount Utility Commission Members Minnegascoo A Division of Arkk, Inc. January 10, 1991, Mr. Stephan Jilk City Administrator City of Rosemount 2875 145th St. W. P.O. Box 510 Rosemount, MN 55068 Dear Steve: We at Minnegasco are committed to completing the approval process necessary to obtain a franchise with the City of Rosemount and appreciate the opportunity to provide you with additional information as requested. As you know, your Public Utilities Commission had recommended approval of our request at its December 9 meeting. Minnegasco is seeking a franchise for the following reasons: *Utilities are required by law to obtain franchises in all cities in which they operate. *Minnegasco and its predecessors have had facilities within the existing city limits of Rosemount since 1%1 when natural gas service was provided to the town of Coates. At that time, these facilities were located in Rosemount Township. *We currently serve 13 customers in Rosemount from a two-inch gas main on County Road 48. This main was installed under permit from Dakota County in 1961 and also serves customers in Nininger and Vermillion Townships. *We have agreed to the franchise stipulations supplied by Rosemount officials which are currently in force with other natural gas utilities and do not wish to disrupt the relationships your city has with other utility companies operating in the area *We would appreciate the opportunity to serve additional customers in the area as designated by your Public Utilities Commission. We look forward to meeting with you on January 15 to discuss this issue further. It is our hope that we could have this matter on your council's January 21 agenda for further consideration. 7Kimberly L . Ro n , Lo overnment/Community Relations 201 South Seventh Street Minnoann}ic MN F5d119 RECEj\D l J W1 i t - CLERKS OF RCE CITY OF ROSEMOUNT ORDINANCE NO. AN ORDINANCE GRANTING TO MINNEGASCO, A DIVISION OF ARKLA, INC., A DELAWARE CORPORATION, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO ERECT A GAS DISTRIBUTION SYSTEM FOR THE PURPOSE OF INSTALLING, ENLARGING, OPERATING, REPAIRING, AND MAINTAINING IN THE CITY OF ROSEMOUNT, MINNESOTA, THE NECESSARY GAS PIPES, MAINS, AND APPURTENANCES FOR THE TRANSMISSION OR DISTRIBUTION OF GAS TO SAID CITY AND ITS INHABITANTS AND OTHERS AND TRANSMITTING GAS INTO AND THROUGH SAID CITY AND TO USE THE PUBLIC WAYS AND PUBLIC GROUNDS OF SAID CITY FOR SUCH PURPOSES. THE CITY COUNCIL OF THE CITY OF ROSEMOUNT, DAKOTA COUNTY, MINNESOTA, DOES ORDAIN: SECTION 1. Definitions Subd. In this Ordinance "City" means the City of Rosemount, County of Dakota, State of Minnesota. Subd. 2. "City Utility System" refers to the facilities used for providing any public utility service owned or operated by City or agency thereof, including sewer and water service. Subd. 3. "Company" means Minnegasco, a Division of Arkla, Inc., a Delaware corporation, its successors and assigns. Subd. 4. "Gas" as used herein shall be held to include natural gas, manufactured gas, or other form of caseous energy. Subd. S. "Notice" means a writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to the Senior Vice President, Operations, thereof at 201 South Seventh Street, Minneapolis, Minnesota 55402. Notice to City shall be mailed to the CITY CLERK. Subd. 6. "Public grounds" means city parks and squares as well as land held by City for the purpose of open space. SMb-d— 7. "Public wayso means streets, avenues, alleys, parkways, walkways, and other public rights-of-way within City. Subd.8• "Gas System" means all mains, pipes, and all other equipment appurtenances and equipment for the transmission, distribution, and sale of natural gas in City. SECTION 2. Grant of Franchise City hereby grants Company, for a period of 15 years from the date hereof, the right and privilege of erecting a gas distribution system and using the public ways and public grounds of City for the purpose of installing, operating, repairing, and maintaining, in, on, over, under, and across the same, all gas pipes, mains, and appurtenances, usually, conveniently, or necessarily used in connection therewith, for the purpose of the transmission of gas, or the distribution of gas, for public and private use within and through the limits of City as its boundaries exist or as they may be extended in the future. Company may also do all reasonable things necessary or customary to accomplish these purposes subject, however, to the further provisions of this franchise. SECTION 3. Restrictions Subd_1. All gas pipes, mains, regulators, and other property and facilities shall be so located, constructed, installed, and maintained as not to endanger or unnecessarily interfere with the usual and customary trade, traffic, travel upon, and use of public ways of City. in installing, repairing, and maintaining, removing, or replacing said gas pipes, mains, and appurtenances, Company shall, in all cases, place the public ways, in, on, under, or across which the same are located in as good condition as they were prior to said operation. Subd. 2. Company shall not construct any new or modified installations within or upon any public grounds without receiving the prior written consent of an authorized representative of City for each such new installation. Subd. 3. Company shall provide field locations for all its underground facilities within 48 hours of notification to Gopher State One -Call as required by state law. ubd. 4. Before Company constructs any new structure or converts any existing structure for the manufacture or storage of gas, Company shall first obtain the approval of the structure and the location thereof from City. Such approval by City shall not be unreasonably withheld. 2 Sub". After undertaking any work requiring the opening of any public way or public ground, Company shall restore the same, including paving and its foundation, to as good condition as formerly existed, and shall maintain the same in good condition for two (2) years thereafter. The work shall be completed as promptly as weather permits. if Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment, and material and put the public way or said public ground in the said condition, City shall have, after demand to Company to cure said condition and the passage of a reasonable period of time following the demand, but not to exceed five days, the right to make the restoration at the expense of Company. Company shall pay to City the cost of such work done for or performed by City including its administrative expense and overhead. This remedy shall be in addition to any other remedy available to City. SECTION 4. Service, Rates The service to be provided and the rates to be charged by Company for gas - distribution or transmission service in City are subject to the jurisdiction of the Public Utilities Commission of this State or its successor agency. SECTION 5. Relocating bd. 1. Whenever City shall grade, regrade, or change the line of any public way, or construct or reconstruct any City utility system therein and shall, in the proper exercise of its police power, and with due regard to seasonable working conditions, when necessary order Company to relocate permanently its mains, services, and other property located in said public way, Company shall relocate its facilities at its own expense. City shall give Company reasonable notice of plans to grade, regrade, or change the line of any public way or to construct or reconstruct any City utility system therein. However, after Company has so relocated, if a subsequent relocation or relocations, shall be ordered within ten (10) years from and after first relocation, City shall reimburse Company for such non -betterment relocation expense which Company may incur on a time and material basis; provided, if subsequent relocations are required because of the extension of City utilities to previously unserved areas, Company may be required to relocate at its own expense at any time. Subd. 2. Nothing contained in this franchise shall require Company to relocate, remove, replace, or reconnect at its own expense its facilities where such relocation, removal, replacement, or reconnection is for convenience and not of necessity in the construction or reconstruction of a City utility system or extension thereof. aubd. 3. Any relocation, removal, or rearrangement of any Company facilities made necessary because of the extension into or through City of a federally aided highway project shall be governed by the provisions of Minnesota Statutes Section 161.46 as supplemented or amended; and further, it is expressly understood that the right herein granted to Company is a valuable property right and City shall not order Company to remove or relocate its facilities without compensation when a public way is vacated, improved, or realigned because of a renewal or a redevelopment plan which is financially subsidized in whole or in part by the Federal Government or any agency thereof, unless the reasonable non -betterment costs of such a relocation and the loss and expense resulting therefrom are first paid to Company. Subd._4. Nothing contained herein shall relieve any person, persons, or corporations from iiability arising out of the failure to exercise reasonable care to avoid injuring Company's facilities while performing any work connected with grading, regrading, or changing the line of any public way, or with the construction of any City utility system. SECTION 6. Indemnification Company shall indemnify, keep, and hold City free and harmless from any and all liability on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, or operation of Company's gas facilities located in, on, over, under, or across the public ways and public grounds of City, unless such injury or damage grows out of the negligence of City, its employees, or agents, or results from the performance in a proper manner of acts reasonably deemed hazardous by Company, but such performance is nevertheless ordered or directed by City after notice of Company's determination. In the event a suit shall be brought against City under circumstances where the above agreement to indemnify applies, Company at its sole cost and expense shall defend City in such suit if written notice thereof is promptly given to Company within a period wherein Company is not prejudiced by lack of such notice. if such notice is not reasonably given as hereinbefore provided, Company shall have no duty to indemnify nor defend. if Company is required to indemnify and defend, it will thereafter have complete control of such litigation, but Company may not settle such litigation without the consent of City, which consent shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to 'City; and Company, in defending any action on behalf of City shall be entitled to assert in any action every defense or immunity that City could assert in its own behalf. SECTION 7. Vacation of Public Ways City shall give Company at least two weeks' prior written notice of a proposed vacation of a public way. Except where required solely for a City improvement project, the vacation of any public way, after the installation of oas facilities, shall not operate 4 to deprive Company of its rights to operate and maintain such gas facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall City be liable to the Company for failure to specifically preserve a right-of-way under Minnesota Statutes Section 160.29. SECTION B. Written Acceptance Company shall, If it accepts this Ordinance and the rights and obligations hereby granted, file a written acceptance of the rights hereby granted with the City Clerk within ninety (90) days after the final passage and any required publication of this Ordinance. SECTION 9. Provisions of Ordinance ubd. 1. Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part; and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part. Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail. Subd, 2. If either party (City or Company) asserts that the other party is in default in performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy. The notification shall be written. If the dispute is not resolved within 30 days of the written notice, either party may commence an action in District Court to interpret and enforce this franchise or for such other relief as may be permitted by law or equity for breach of contract, or either party may take any other action permitted by law. Subd. 3. This Ordinance constitutes a franchise agreement between City and Company as the only parties and no provision of this franchise shall be in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. SECTION 10. Safety Training Company shall provide annually, the first of which within 90 days from the adoption and acceptance of this franchise, training for employees of City, basic response and awareness techniques as to the safe operation and maintenance of the Company system. The purpose of this training is to "assist the City Public Works Department and the City Fire Department in response to incidence requiring their assistance relating to Company's facilities in the City. 5 SECTION 11. Emergency Respons_ a Telephone Number Company shall provide a 24-hour emergency telephone number providing access to Company by City for emergency response purposes. This telephone number must be separate from the general service response telephone number and must provide meaningful access to Company for emergency response. SECTION 12. Publication Expend The expense of any publication of this Ordinance required by law shall be paid by Company. SECTION 13. Effective Date This Ordinance is effective as provided by statute or charter, and upon acceptance by Company as provided in Section 8. Passed and approved: -'19—. Mayor Attest: City Clerk I:ROSEMOUN R . fes, S ACCEPTANCE OF ORDINANCE NO. CITY OF ROSEMOUNT, DAKOTA COUNTY, MINNESOTA ACCEPTANCE OF FRANCHISE: WHEREAS, the City Council of the City of Rosemount, Dakota County, Minnesota, on the day of , 19 , passed and adopted Ordinance No. , entitled: AN ORDINANCE GRANTING TO MINNEGASCO, A DIVISION OF ARKLA, INC., A DELAWARE CORPORATION, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO ERECT A GAS DISTRIBUTION SYSTEM FOR THE PURPOSE OF .INSTALLING, ENLARGING, OPERATING, REPAIRING, AND MAINTAINING IN THE CITY OF ROSEMOUNT, MINNESOTA, THE NECESSARY GAS PIPES, MAINS, AND APPURTENANCES FOR THE TRANSMISSION OR DISTRIBUTION OF GAS TO SAID CITY AND ITS INHABITANTS AND OTHERS AND TRANSMITTING GAS INTO AND THROUGH SAID CITY AND TO USE THE PUBLIC WAYS AND PUBLIC GROUNDS OF SAID CITY FOR SUCH PURPOSES. which Ordinance was duly published according to law on the day of , 19 , in the Dakota County Tribune, a newspaper printed and puoiished in the City of Rosemount, County of Dakota, State of Minnesota, and which Ordinance is not effective unless accepted in writing by Minnegasco, a Division of Arkla, Inc. NOW, THEREFORE, Minnegasco, a Division of Arkla, Inc., a Delaware corporation for itself and its successors and assigns, does hereby accept all the terms and conditions of said Ordinance. 1 IN WITNESS WHEREOF, Minnegasco, a Division of Arkla, Inc. has caused this document to be executed in its corporate name by its duly authorized persons and its corporate seal to be hereto affixed this day of , 19 MINNEGASCO, A DIVISION OF ARKLA, INC. By Its ATTESTATION: ARKLA, INC. By Its Assistant Corporate Secretary [CORPORATE SEAL] k:OSEMJUNYA RSG 2